Please note that this tutorial was written for Logic Pro 9 and although the basic principles are likely to remain the same for future updates, some of the visuals may not exactly match up with what you see in future versions.
Sidechaining is a useful tool for creative, practical and mixdown purposes. It essentially allows you to control the level of one signal using another signal. It is commonly used for creating a 'pumping' effect in dance music, as the bass swells in and out between kick drum hits. It is also used for lowering the level of certain sonic elements in a song to make room for more important elements (e.g. a lead vocal), amongst many other things.
In this video, Gareth shows you how to create a basic side-chain set-up in Logic Pro 9.